Category: Facebook

The Microsoft/Yahoo! Threats to Privacy Issues Exemplied by Ad Industry Reaction to Deal

Once again, we thank the ad industry for writing our blog (and regulatory!) copy: “”I think what we lose in being able to negotiate with both of them we’ll gain with new opportunities. The biggest opportunity would be to leverage Yahoo’s behavioral targeting across Microsoft’s relationships with Facebook, XBox and Massive, which has the ability to dynamically insert ads in console games.”–Andrea Kerr Redniss, SVP, Optimedia US.”

from: Madison Avenue: We Love MSFT-YHOO. Silicon Valley Insider. Feb. 1, 2008.

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CDT & the Internet Education Foundation: Watch Out they Don’t Undermine the fight for Social Network Privacy

The Internet Education Foundation (IEF) plays an unfortunate gatekeeper role for the Congressional Internet Caucus. Jerry Berman serves as the chair of both the Center for Democracy & Technology (CDT) and the IEF (the two groups also have board members in common). IEF’s most high-profile project is the Advisory Committee to the Congressional Internet Caucus, which organizes events for Congress on new media issues. This Wed. (Jan. 30), the group is holding its annual “State of the Net” event. Such congressional meetings really require a group independent of the special interests–especially on a topic so important as the role digital communication plays in a democracy. The event has been structured to be a tame affair–there will be little reality discussed about the real state of digital communications (since groups funding the congressional meeting–including Verizon, Google, Microsoft, AT&T–wouldn’t feel generous in their future giving if they faced a serious critique).

Take the panel on social networks, entitled: “Social Networking Privacy: An Oxymoron?” Such a title fits into the current interactive ad industry/MySpace/Facebook lobbying frame that claims young people don’t care about protecting their personal data. Social network users, especially teens, are being encouraged to place all their personal details on such sites without real safeguards. That’s why it’s time for new privacy policies that provide serious privacy protections on social networks. We urge everyone to read the recent EU paper on the subject, which should help galvanize the public into action. A responsible society should act swiftly to protect privacy online, especially for its youth. As the debate builds on social networks and privacy, it will be vital to inform policymakers about the real story.

IAB and its Proposed Privacy Guidelines: Will Fail to Effectively Protect the Public

So relieved where some in the interactive ad business when they read the FTC’s staff proposed privacy principles released last month that commentators described the reaction as the industry had “dodged a bullet” and “breathed a sigh of relief” [“FTC Online Ad Targeting Guidelines: Industry Breathes A Sigh Of Relief”].

Now Paidcontent describes plans underway by the IAB to offer “privacy standards,” via a “15-member working group,” that includes Time Warner, Microsoft, Yahoo! and others [“Online Ad Industry Groups Take Steps To Self-Police”]. According to the January 4, 2008 article by David Kaplan “[T]he IAB task force will address issues of consumer notice and choice, in terms of deciding the context for selecting opt-in or opt-out.”

IAB lobbyist Mike Zaneis says in the article that “[T]he level of appropriate choice needs to be flexible…consumer regulation will prove to be more efficient and powerful than government regulation.” Zaneis considers the campaign against Facebook that resulted in some modest–and ineffective in my view–changes in its data collection system as an illustration of “consumer regulation.” It’s clear that the IAB is incapable of developing a policy that will protect consumers. Anyone who understands the contemporary dimensions of the interactive marketing industry–and has the public welfare in mind–should recognize what is required. The IAB will not be taken seriously if it can’t deliver the truth (it’s so far failed to protect the public from troubling online lead generation practices, for example. See our November 1, 2007 FTC filing). Yahoo!, Microsoft, Time Warner and others on the committee should lead–and not follow–advice from the IAB that will lead to prolonged political conflict–in Europe, in Congress, at the FTC and FCC, and with the incoming Administration.

Real governmental rules are required–including measures that effectively protect every consumer and also address vulnerable groups and sensitive marketing issues. The IAB’s old school Beltway mentality will likely give online advertisers a bad name. Where are the ad industry’s thoughtful leaders who can help steer the IAB in an honorable direction?

The Interactive Ad Bureau: Its Political Posture is a Liability for the Advertising Industry

On December 14, the head of the U.S. Interactive Advertising Bureau–Randall Rothenberg–wrote a commentary for the Wall Street Journal (“Facebook’s Flop” sub. required) that will be used by graduate students someday as an example of what shouldn’t be done to help an industry address a political crisis. Using old cliches, scare tactics, name-calling, the piece reflects a real failure on the part of the IAB to address an important policy issue that affects everyone–including families. It also shows an inability to recognize concerns about online privacy in an historic context. Such an approach may be useful for rallying some of the old guard. But more sophisticated advertisers and marketers will recognize that the online ad industry doesn’t benefit from embracing such an approach.

So instead of saying that there has long been a concern about online privacy, including for children, we are called “anti-business groups.” Instead of admitting that advertisers and marketers are shaping the new media system so it can better track and target us all, the IAB head claims “the consumer is in control.” Instead of admitting that it was the request made by my group and others for the FTC and the European Commission to investigate Facebook’s “Beacon” system, it says that it just took Moveon to force a (partial) retreat (anyone who has political savvy recognizes it was the combination of Moveon’s organizing, the raising of public policy concerns, and advertiser skittishness that led to the Facebook change). The commentary claims we are calling for “the banning of behaviorally-targeted ads.” But almost everyone else recognizes that we have called for meaningful privacy safeguards for behavioral and interactive marketing practices that would protect consumers.

Finally, the oldest canard in the business is used, claiming that without advertising all the “free” content online would disappear. “Advertisers are paying for it,” it is said. Nothing about how consumers ultimately pay for all this–including now their loss of data, privacy and autonomy.

Anyone with insight into where we are historically with interactive media and marketing should recognize that the privacy and marketing related issues must be honestly dealt with. Old style lobbying may show some muscle, but will backfire. Here’s hoping 2008 will bring the gift of better reflection at the IAB–to its officers, board members, and members.

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Statements on Mark Zuckerberg’s “Thoughts on Beacon” announcement

From: Jeff Chester, Executive Director, Center for Digital Democracy [202-494-7100]

Kathryn C. Montgomery, Ph.D. Professor of Communication, American University. Author of Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet (MIT Press, 2007) [202-885-2680]

Jeff Chester: “Today’s announcement that Facebook users will be able to turn off Beacon, following last week’s opt-in changes, is a step in the right direction. But Mr. Zuckerberg isn’t truly candid with Facebook users. Beacon is just one aspect of a massive data collection and targeting system put in place by Facebook. It’s not really about the company’s desire ‘to build a simple product…lightweight’ that would, as he writes, ‘let people share information across sites with their friends.’ Mr. Zuckerberg’s goal, as he explained on November 6, 2007, was to transform Facebook into ‘a completely new way of advertising online.’ Facebook has rewired its social network to better serve the data collection interests of marketers who, promised Mr. Zuckerberg, are now ‘going to be a part of the conversation’.

“Mr. Zuckerberg can’t simply now do a digital “mea culpa” and hope that Facebook’s disapproving members, privacy advocates, and government regulators will disappear. Nor should Facebook’s brand advertisers permit this statement to diminish the real privacy and security concerns embodied by Facebook’s new targeted ad system. CDD will continue to press U.S. and EU regulators to address Facebook’s significant privacy problem.”

Kathryn Montgomery: “Facebook’s announcement today is a stopgap measure designed to quell the huge public outcry from consumer groups and users over its ill-advised new marketing scheme. The move to allow users to turn Beacon off entirely may restore a small measure of control to Facebook’s members, but it is by no means an adequate safeguard for ensuring privacy protection on this and other social networking platforms. These companies are continuing full steam ahead with new generation of intrusive marketing practices that are based on unprecedented levels of data collection and personal profiling. Regulatory agencies in the U.S. and in Europe need to conduct a thorough investigation of these new forms of social network marketing and develop rules to ensure that consumers are fully protected in the emerging broadband era.”

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EC Enisa Report Underscores Privacy Threats and other Risks from Social Networks: Wake-Up Time for Facebook, MySpace, IAB, FTC, Congress. Rules & Safeguards Required

The expanded targeting based on user profile activity launched last month by both Facebook and MySpace underscore why we must craft federal (and EU) rules to govern the data collection apparatus of social networks. By combining behavioral targeting, transaction data, and profile information, Facebook and others have entered into a new territory. Even industry insiders understand how a line has been crossed: one senior VP at Digitas (part of the Publicis Groupe ad industry empire) noted that [our emphasis]:

“Facebook has made an announcement that has major implications for how marketers can communicate to members going forward. Essentially, Facebook said that it will allow marketers to target members with ads based on its user’s personal profiles, social connections and even the recent activities of each user’s extended network.

This announcement marks a significant departure in the way social networks have been organized to date. Until now, marketers have had limited opportunity to serve ads directly to users within the social network. With this change, marketers will now have the opportunity to target consumers directly based on attitudinal, behavioral and demographic attributes included directly in or inferred from personal profiles and connections online.”

We have sent out to the FTC today this new report [pdf] by ENISA—the European Network and Information Security Agency. Released in October, “Security Issues and Recommendations for Online Social Networks” is worth reading—for its clear and thoughtful analysis and, frankly, its disturbing implications. It’s clear from the start of the paper that social networking sites (SNS) are more than just commercial or personal playgrounds—they are, notes ENISA—“…all-embracing identity management tools…” As the report explains:

“Users are often not aware of the size or nature of the audience accessing their profile data and the sense of intimacy created by being among digital `friends’ often leads to disclosures which are not appropriate to a public forum. Such commercial and social pressures have led to a number of privacy and security risks for SN members.”

Among the “threats” the report lists includes:

1.1 Digital dossier aggregation: profiles on
online SNSs can be downloaded and stored
by third parties, creating a digital dossier of
personal data.
1.2 Secondary data collection: as well as data
knowingly disclosed in a profile, SN
members disclose personal information
using the network itself: e.g. length of
connections, other users’ profiles visited
and messages sent. SNSs provide a central
repository accessible to a single provider.
The high value of SNSs suggests that such
data is being used to considerable financial
gain.
1.3 Face recognition: user-provided digital
images are a very popular part of profiles
on SNSs. The photograph is, in effect, a
binary identifier for the user, enabling
linking across profiles, e.g. a fully identified
Bebo profile and a pseudo-anonymous
dating profile.
1.6 Difficulty of complete account deletion:
users wishing to delete accounts from SNSs
find that it is almost impossible to remove
secondary information linked to their
profile such as public comments on other
profiles.

Among the report’s other recommendations include the need to consider reviewing regulatory safeguards and data protection law, such as the FTC’s Fair Information Practices. Social networks have become a place where people are living out their lives, sharing intimate details about their identity. They cannot be operated as data mining and digital marketing operations solely. They must operate in the public interest as well, including rules protecting privacy for those under 18.

It’s time for a broad range of stakeholders to work together to address what must be done.

PS: ENISA held a conference on the issue last June, featuring a number of interesting papers.

The Future of Behavioral Targeting Regulation–First in a [very long] series

Now that the EU’s Article 29 Working Group has announced plans to investigate behavioral targeting as part of its 2008 workplan, advocates and regulators from both sides of the Atlantic can build the case for meaningful safeguards. The goal should be maximum privacy protection. It’s interesting to see the response coming from European-based behavioral targeting firms, such as nugg.ad.ag. In an article for the UK-based imediaconnection trade report, nugg.ad’s co-founder removes the use of IP addresses from the targeters arsenal, writing that “… even IP addresses has no place in targeting.” That will come to a surprise to many in the online marketing industry!

Nugg.ad is engaged in a range of targeting efforts that require the scrutiny of data regulators. But just in case you thought their rejection of IP address targeting made them a worthy of a privacy prize, you would be mistaken. In the same article, the nugg.ad executive describes the new generation of data that can be mined by marketers [our emphasis]: “Web 2.0 offers a better option — user-generated content, be it through word, sound or image, which is fitted with ‘tags’. These community recommendations lift contact management to a new level. By using targeting technology that can be applied flexibly, you can develop completely novel approaches and exploit untapped potential.”

The Article 29 group will surely be working.

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Facebook’s Expanded Ad Targeting: Follow the Algorithm

From Search Insider: “The most striking word that came up repeatedly when I heard someone from Facebook present was “algorithm.” It’s the algorithm that determines how many stories appear in the News Feed, which users members share connections with, and which types of actions are involved. It knows which friends you’re most closely connected to, not just based on how you interact with them, but by factoring in when you and your friends independently interact with the same content. This algorithm might know who your friends are better than you do.”

The evolution of targeting users online (or, "Oh where oh where has our privacy gone")

An excerpt from a recent trade piece that should encourage reflection and concern (our emphasis):

“Today, we can not only target by the sites we think our customers frequent, we can follow them around the Web and target them based upon the other sites they actually visit. We can also target them based upon the words typed into a box, and from where those words are typed through search geo-targeting. We can also retarget searchers elsewhere on the Web. Facebook’s recent announcements take targeting to a whole new level, based upon age, location, interests, and other online activity.”

Source: “Search And Online Advertising: A Continual Evolution.” Ellen Siminoff. Search Insider. November 16, 2007

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IAB creates new post: "SVP, Thought Leadership and Marketing."

As the IAB ramps up its political operation to defend the interactive marketing industry from consumer-friendly privacy safeguards, it has created a new senior position. The SVP for Thought Leadership and Marketing is… “to help drive the growth of interactive advertising through enhanced communications with marketers, agencies, and others about the power of interactive media to reach and influence consumers.” In another words, a seasoned PR hand. David Doty is now in that position; he came from Booz Allen Hamilton where he was Director of Corporate Branding and Creative Services.”

But what IAB requires is “thought leadership” that recognizes that interactive marketing can’t run a-muck. Consumer protections are required, as well as a socially responsible approach to digital advertising in a global environment.

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